Pages

Thursday, 31 March 2011

Bribery Act The Implications for Sales

The new revised guidelines from the Government for the Bribery Act 2010 due to come into force in July 2011 have now been issued.

They have satisfied the CBI but alarmed certain ethical campaigners.

Lawyers who advise client companies looking to offer corporate hospitality to their customers suggest suppliers will now need to be very cautious and to think carefully about what they offer, who they offer it to and why they are offering it.

Similarly, buyers who receive corporate hospitality invitations will need to carefully consider the nature of those invites and how they tally with their organisation’s anti-bribery procedures and policies.

An opinion poll conducted by Galup for Transparency International published in December 2010 into the UK's views ( sample of 2,014) of the potential for corruption in the UK produced some interesting numbers.

The full report is due to be published in Summer 2011. There is a clear trend that respondents perceive corruption in the UK as having increased. Despite this , when compared to equivalent surveys in other countries , the UK appears to be less prone to corruption than many other countries, but with some areas of concern about particular institutions.

53.4% believed that corruption levels have increased over the last three years whilst only 2.5% believed corruption had reduced a little or a lot over the last three years. There is a negligible level reported of bribe paying.

Approximately 59% claim they have never been affected by corruption in the UK with a large number of don't knows.

There is a mismatch between respondents' willingness to report corruption and their knowledge where to report it. - 92 & amp;% would like to report it but only 30% would know where to report it.

At the same time, the majority of people either do not trust anybody to fight corruption or does not know who to trust.

Respondents were asked to suggest how corrupt they perceived specific sectors to be. (Using a score of 1= not at all to 5= extremely corrupt.) The ranked sectors according to the % of respondents scoring 4 or 5 were:-

No 1 spot went to political parties got top position at 65.5

No 4. was local government ranked with a score of 47.4

No. 5 was Business with a score of 43.8, No 6. were 41.3.

The least corrupt were at No 14. NHS, 15. Military and 16. Education System.

Nonetheless the revised guidelines for the Bribery ACT 2010 have been issued. The government does not intend that genuine hospitality of similar business expenditure that is reasonable and proportionate be caught by the Act, so you can continue to provide a bona fide hospitality, promotional or other business expenditure," said the guidelines.

There had been quite a kerfuffle during the first quarter of 2011 over whether corporate hospitality would fall under the act. The CBI now feels the Government has listened to concerns that honest companies could have been unwittingly caught out by poorly-drafted legislation and has clarified a number of important areas.

These include the extent of liability through:- the supply chain, joint ventures, due diligence and corporate hospitality. Parts of the guidance publication “strongly indicate that the government has surrendered to last-minute lobbying by some business groups” TI UK said, “opening up loopholes that could allow dishonest companies to continue paying bribes”.

TI UK have alerted the press to the “loophole” that exempts foreign companies listed on the London Stock Exchange from the rules as one area of serious concern. Ethics campaigners reckon The Ministry of Justice (MOJ) has exceeded its brief with this final guidance which undermines the Act and will limit its effectiveness. This seems to contradict the government’s original stated aim of creating a level playing field through the Act’s reach abroad.

Campaigners fear there is now a significant risk that bribery will go unpunished.

The UK's Ministry of Justice has outlined six areas which companies can use to show they have not committed an act of bribery, they are:

1. Proportionality – large organisations may have to make more effort to prevent bribery than small ones.

2. Top Level Commitment – having procedures in place to prevent bribery.

3. Risk Assessment – conducting research into your markets.

4. Due diligence know exactly who you are working with

5. Communication– inform staff and contractors of their responsibilities

6. Monitoring and review– change responsibilities as company evolves Campaigners the guidance for the Act read more like advice on how to evade the Act, than how to develop company procedures that will uphold it.

The changes made to the draft guidance since late last year, depart from international good practice ( OECD) in several areas. Over the next three months I guess we will all need to revise our anti-bribery policies ready for the Act’s implementation on the first of July. ( Probably sensible to seek legal advice)

Minister Ken Clark has suggested that the Serious Fraud Office will take a common-sense approach to enforcement, ensuring it is reasonable and risk-based. It is important that the new ACT avoids creating a culture of fear that could undermine UK competitiveness abroad.

No comments:

Post a Comment

Search This Blog

About Me

I have been a training consultant for 30 years.
I also research Buyers Views of Sales people for an ongoing research study I have done for the last twelve years
The majority of photographs, videos and audios in this blog are taken on my new Fujifilm Fine pix T from May 2012 The Pencil Sketches are mine also